With the UK reporting its highest number of daily COVID-19 cases since the pandemic started yesterday – a new record high of 78,000 – the Prime Minister’s warning that people should “exercise caution” where possible is unsurprising.
For businesses that have survived a rollercoaster year of forced closures, tightly controlled capacity and lower footfall, the lack of Government support to tackle this latest challenge is a significant blow in a period where they usually do their best business. This is particularly acute in the hospitality sector, where lower consumer confidence and a flurry of last-minute cancellations have had a significant impact on businesses.
In 2020, the sector saw unprecedented intervention from a Conservative Government traditionally opposed to bailouts. The furlough scheme and VAT reductions helped many businesses weather the storm of prolonged national lockdowns, and the alcohol duty cut announced in this Autumn Statement was seen as a mark of the Government’s continued support for the sector.
Now, as pubs and restaurants are hit by a surge of cancelled bookings, the “party of business” seems to be taking a different approach. The rhetoric coming from Government points to the continuation of existing support measures and the fact that no outlet has been forced to close. However, there seems to be little acknowledgement that businesses will be hard hit by the behavioural changes prompted by increased case numbers and Government warnings to “socialise sensibly”, which has led to a wave of cancellations ahead of Christmas.
The Government’s thinking is not surprising. Last year’s interventions cost the UK economy billions and the long path to recovery set out by the Chancellor was a clear indication that similar action would not be taken again. It is clear that the Government will not intervene unless it is absolutely necessary.
However, with headlines majoring on UK Hospitality’s warning of far-reaching closures and job losses if steps aren’t taken to support the sector, coupled with news images of empty pubs and restaurants, pressure to intervene will surely mount in the coming days.
Rishi Sunak is set to meet industry representatives to discuss the case for additional support as consumer confidence continues to dip and cancellations continue to rise. At this point, it’s unclear whether the Government will act to stem the risk of further closures, but without it the sector faces further challenges in 2022 as the prospect of further restrictions becomes a reality.
In any case, all eyes are on the Government’s next move and any further intervention would set a precedent for future support in other sectors.